FX.co ★ USD/CAD

USD/CAD Extends Decline – Fair Value Gaps and Liquidity in Focus The US Dollar continues to weaken against the Canadian Loonie, with USD/CAD trading at 1.38745, down -0.41% on the session. The pair is pressing lower on the 30-minute OANDA chart, having broken below a series of structural levels as sellers capitalize on broad USD softness and firmer oil prices. The presence of multiple Fair Value Gaps (FVG) and DLiq (Dealer Liquidity) zones suggests that price is aggressively hunting for institutional order flow, which could dictate the next leg. The chart shows two distinct FVG areas – one around the 1.3920–1.3940 region and another higher near 1.3940–1.3960. These gaps typically act as magnetic zones that price tends to revisit before continuing its trend. Currently, price has gapped below these levels, indicating strong downside momentum. However, the FVGs now serve as potential resistance on any pullback, with the lower FVG boundary at 1.3920 likely to attract selling interest if price retraces. A recovery above this area would negate the immediate bearish structure and could trigger a short squeeze toward the upper FVG near 1.3960. On the downside, the "2 Bottom Liq" marker near 1.3850–1.3860 now becomes the critical near-term support. A break below this liquidity pool would expose the next downside target at 1.3820, followed by the psychological 1.3800 handle. Given that price has already swept higher liquidity earlier, the current decline appears to be a continuation of the bearish impulse rather than a mere correction. Momentum indicators on the 30-minute chart are likely oversold after the sharp drop, though no explicit reading is shown. Traders should watch for a potential bounce toward the FVG zones, but any recovery is likely to be sold into as long as price remains below 1.3920. The broader structure favors the downside, with the pair now trading well below the recent highs near 1.3960. In summary, USD/CAD remains bearish below the FVG resistance at 1.3920, with immediate support at 1.3850–1.3860. A break lower would accelerate selling, while a reclaim of the FVG zone could signal a shift in momentum. Patience is key – confirmation via a 30-minute close above or below these levels will provide clearer directional cues.